Twitter user @packyM captured the rare site on the beach in Avalon, NJ near 64th Street.
These are neither fire nor rainbows. Technically they are known as a circumhorizontal arc, an ice halo formed by hexagonal, plate-shaped ice crystals in high-level cirrus clouds. The halo is so large that the arc appears parallel to the horizon, hence the name.
These appear mostly during the summer and only in particular latitudes. When the sun is very high in the sky, sunlight entering flat, hexagon-shaped ice crystals gets split into individual colors just like in a prism.
The conditions required to form a "fire rainbow" are very precise. The sun has to be at an elevation of 58 degrees or greater, there must be high altitude cirrus clouds with plate-shaped ice crystals, and sunlight has to enter the ice crystals at a specific angle.